Group Wants St. Cloud Utility Board

April 9, 1986|By Michael Griffin of The Sentinel Staff

ST. CLOUD — A group opposed to the city's plan for financing $20 million in improvements to the electrical system will try to wrest control of utilities from council members. They want to ask voters to approve establishment of an independent utility commission.

City Manager Jim Chisholm said the attempt could destroy investor confidence in the city's ability to pay back the bonds and hurt its chances of raising the money.

The city council last month approved the 30-year bond plan that would raise the average monthly bill by about $12. Customers now will pay about $88 per 1,000 kilowatt hours instead of $76. The plan also calls for the monthly rate to increase $1.10 for each of the 10 years to pay for capital improvements. The increase takes effect May 1.

Opponents hope the increases will jolt St. Cloud voters into approving the commission, an idea they turned down 2 to 1 in 1984.

''The people are going to scream when they see their bills next month,'' said Josephine Bishop, who is spearheading the campaign. ''We think this is our chance to force the issue and see that our utilities are run like a business and that politics will be taken out of the operation.''

Bishop said supporters will meet within two weeks to organize the campaign. Supporters who plan to attend the meeting include former Mayor Sara Lewis, utility advisory chairman Dudley Grimes and resident Marty Nash.

Each opposed the council's decision repay the bonds over 30 years. They supported a 15-year pay-back. It would have meant a higher rate increase, but would have saved residents $20 million in interest payments.

Chisholm said the campaign could harm St. Cloud's bond plan. ''Our potential investors are going to wonder who will be responsible for paying back the money. This will cause some concern and it could threaten the improvements we need at that plant.''

The bond package is approved, but still needs to be given a financial rating by an investment house, such as Standard and Poor's, or Moody's, which would affect the price at which the bonds could be sold.

But supporters say customers ultimately will be responsible for paying off the bond through rate increases.

''We've got the bond now,'' Grimes said. ''The rate structure set in place will repay the bond.

''I know damn well that I won't get reappointed to the utility advisory committee,'' Grimes said, ''but the only way to ensure a viable utility service is by setting up a politically independent commission.''

Appointments are made by the council.

Mayor Bob Renick called the commission's backers ''foolish. The people spoke in 1984, but I guess they need to hear that voice again.''

Renick said that residents have direct influence on utility decisions through their elected council members. ''If you set up this commission it will move the decision-making process one step further away from the people. If the council makes a decision customers don't like they can vote the council out every two years.

''We'd be stuck with a commission and they'd be able to do whatever they want,'' he added.

A year ago Kissimmee voters approved establishment of a separate utility authority. The city commission actively supported the authority as a way to give the utilities full-time management.

The members of the Kissimmee Utility Authority serve five-year terms and are appointed by city commissioners. The five-member authority has the final say over everything from rate increases and salaries to expansion and finance plans.

According to the Florida Municipal Utilities association, creating an authority takes decisions out of the political arena. Changes would be based on good business sense rather than the current political mood.

The disadvantage is that commissioners often find themselves on the opposite side of the fence from city governments. In Lake Worth, the commissioners hired a new $50,000-a-year director without approval of the city council. After a lengthy court fight, the Florida Supreme Court ruled in favor of the commission. As a result of that case, city officials refused to work with the commission and Lake Worth utility customers lost faith in the organization.

In St. Cloud, Renick said a utility commission would result in higher property taxes. ''If the city were unable to use profits from the electric utility to fund services, we would have to raise the money somewhere else and that means taxes.''

But Lewis, who served as mayor from 1978 to 1982, said the city still could have access to utility profits. ''There is no way you can prevent the city from profiting on a utility it owns,'' Lewis said. ''What we are talking about is a group of qualified people who will be able to make tough decisions that politicians don't seem to have the guts to make.

''We need a full-time commission doing nothing but running our utilities,'' Lewis said. The city council, she added, is ''too busy with other duties to manage the utilities properly.''

To force council members to put a referendum before the voters, supporters must get signatures of 548 of the qualified voters registered for the last city election, said city attorney H.R. Thornton. That is 10 percent of the registered voters.

Bishop said that Kissimmee voters' approval last year of a utility authority would also help get a referendum passed. ''People in St. Cloud will know this time around how a commission works and how beneficial it can be.''

Bishop said the group will elect a chairman and map out strategy at its first meeting. The date, time and place for the meeting have not been set.